Polaroid Fine Gives Kodak Third Quarter Loss
ROCHESTER, N.Y. (AP) _ A $909.5 million patent infringement judgment against Eastman Kodak Co. resulted in a $206 million third quarter loss for the photographic company.
Kodak said Wednesday its earnings would have increased 19 percent for the quarter without the judgment.
The loss, which translated to 64 cents per share, compared with earnings of $300 million, or 93 cents per share, in the third quarter of 1989. Without the charge, earnings for the third quarter of 1990 would have been $358 million, or $1.10 per share.
Kodak was ordered by a U.S. District Court judge in Boston earlier this month to pay Polaroid $909.5 million in a 14-year-old patent infringement suit over Kodak’s sales of instant cameras and film.
″While no money has yet changed hands, and the litigation has yet to be finally resolved, this charge to earnings is appropriate at this time,″ Kodak Chairman Kay Whitmore said in a statement.
Sales increased 5 percent for the quarter to $4.77 billion, vs. $4.54 billion in the same quarter last year.
″The results were pretty much in line with expectations,″ said Peter Enderlin, an industry analyst with Smith Barney, Harris Upham & Co. in New York. ″Sales were a little disappointing but the margins were excellent.″
Kodak benefited from a favorable foreign exchange rate and improvements in productivity gains, Enderlin said.
The company posted gains in its imaging, chemicals and health segments. The only disappointment was the information segment, which includes Kodak’s copier and business operations, where sales dropped 2.9 percent for the quarter.
″I think top management is beginning to lose patience,″ Enderlin said. ″There may be some fairly drastic steps taken with some pieces of that segment if they don’t show tangible gains by the middle of next year.″ Earnings for the first three quarters of 1990 were $377 million, or $1.16 per share, down 36 percent from $589 million, or $1.82 per share, in 1989. Without the Polaroid charge, earnings would have been up 60 percent to $941 million.
Kodak last showed a loss in the fourth quarter of 1989, when the company took a charge of $273 million to pay for a restructuring program in which 7,500 jobs were cut and about 20 businesses were sold or consolidated. That restructuring was announced following depressed earnings in the first three quarters of 1989.